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Abstract

Kazakhstan aspires to become one of the
world s 30 most developed economies by 2050. The focus is on
laying the basis for the accelerated diversification of the
economy through industrialization and infrastructure
development, including enhancing human capital to drive
innovation and economic efficiency. This country economic
memorandum report adopts an analytical framework that looks
into options that will be explored to help authorities think
about diversification across three sectors: diversification
of products and services; diversification of economic
partners; and diversification of endowments. Five chapters
structure this report, outlining the weaknesses and
strengths of the Kazakh economy that will need to be
addressed for increased prosperity. Chapter 1 discusses
Kazakhstan s natural resources and how important it is to
focus on the policies that matter for development and
diversification. Chapter 2 focuses on export concentration
and assesses whether resource dependence leads to
macroeconomic volatility, whether Kazakhstan has been able
to avoid volatility, and what macro-policy solutions are
available to Kazakhstan. Chapter 3 looks at the structure of
employment in the country and assesses whether Kazakh
workers have the skills demanded by the market. Chapter 4
analyzes the regulatory environment and how well market
institutions have developed to strengthen the quality of
institutions. Chapter 5 uses the product space analysis to
assess where Kazakhstan s comparative advantages are. It
then discusses whether the country has faced excessive trade
barriers, whether there is a role for industrial policy, and
what will be done in the short term to help diversification.